The carrier’s planned fleet of six A380s and new Boeing Co.
777-300ERs will help it raise the percentage of seats filled in
premium cabins across its network to more than 70 percent from
about 60 percent, Acting-President Chokchai Panyayong said in a
Sept. 25 interview in Bangkok. He didn’t give a timeframe for
the goal.

Load factors in first and business class are “a little bit
low,” he said. “With improvements in the product and services
we can increase that.”

Thai’s 507-seat A380s and new regional unit Thai Smile will
lead a push to win more business traffic as low-cost airlines
lure leisure flyers. Budget airlines eventually may boost their
share of regional travel to as much as 35 percent from 20
percent, Chokchai said.

“The A380 is a huge plane so it will be beneficial on
routes with high traffic and limited frequency,” said Nalyne
Viriyasathien, an analyst at DBS Vickers Securities (Thailand)
Co. in Bangkok. “But, it can turn into a loss-maker if the
company can’t fill enough seats in the low season.”

State-controlled Thai, the ninth A380 operator, will
install its aircraft with 12 first-class seats, 60 in business
and 435 in coach. The new planes, which also feature bar areas,
will replace 375-seat Boeing 747-400s that have been in service
for more than 20 years.

Singapore, Hong Kong

The first superjumbo was handed over in Toulouse, France.
It will make its debut commercial flights on Oct. 6, with trips
to both Singapore and Hong Kong. Services to Frankfurt will
start in mid-December following the introduction of a second
A380. Early next year, A380s will also be added on Tokyo and
Paris flights.

Thai will pay for the A380s with loans and has no plans to
issue bonds or sell shares. The aircraft will let the airline
add seats at congested airports, lacking slots for additional
flights, said Chokchai.

“We’re expecting the A380s to serve a huge number of
people,” he said. “The size is the solution for the slots.”
Chokchai will move to a strategic-planning role when incoming
President Sorajak Kasemsuvan arrives in October.

Malaysian Airline System Bhd. also received its first
superjumbo this year as it similarly tries to win more premium
flyers. Singapore Air got its 19th and final A380 earlier this
month. Emirates, the largest customer for the A380, is building
up a fleet of 90.

Thai Smile

Thai is developing regional unit Thai Smile with a
“premium position,” similar to Singapore Air’s SilkAir, to
help win business travelers, Chokchai said. The unit, which
began flights in July, will expand its fleet to 20 Airbus A320s
within three years and add services to neighboring countries and
southern China, he said. SilkAir ordered 54 Boeing 737s last
month because of rising regional travel.

Thai is again considering entering the low-cost market
after scrapping a planned venture with Singapore Air’s budget
affiliate Tiger Airways Holdings Ltd. The carrier may set up a
new airline or transform 49 percent-owned affiliate Nok Air,
Chokchai said.

Final Decision

“We think that Nok may be the solution,” he said. A final
decision should be made by next month, he said.

Thai’s push into premium markets comes as an economic
slowdown damps corporate and long-haul travel demand. Cathay
Pacific Airways Ltd. is cutting long-haul services as it retires
747 planes and because the overall market on key corporate
routes including London, New York and Beijing is shrinking.

The carrier has risen 9.5 percent this year in Bangkok
trading. It fell 0.5 percent to 21.90 baht today.

Thai may still be able to hit its annual profit forecast of
6 billion baht, depending on fuel prices, Chokchai said. The
carrier has hedged at least 80 percent of its fuel needs for
this year. It has also hedged about 50 percent of next year’s
consumption at between $105 to $130 a barrel.

Busiest Time

The carrier narrowed its loss in the second quarter to 1.5
billion baht, helped by currency gains. Load factors across its
fleet have dropped to about 74 percent this month from more than
76 percent in the first half, Chokchai said. The carrier
anticipates filling about 78 percent seats in the next two
quarters, which are the busiest time of the year for the
country’s tourism industry.

“The leisure market has been impacted a little bit but
it’s not too bad,” Chokchai said. European sales have been
better than expected given the economic situation, he said.

The carrier is also considering planes including Airbus
A350-1000s and Boeing’s proposed 787-10 and 777x for its long-haul fleet, he said. The carrier will wait for Boeing to
finalize its plans for the 777x before making a decision, he
said.